{"id":5931,"date":"2017-01-19T02:21:08","date_gmt":"2017-01-18T18:21:08","guid":{"rendered":"http:\/\/www.wineblogchina.com\/?p=5931"},"modified":"2017-01-19T02:21:08","modified_gmt":"2017-01-18T18:21:08","slug":"group-interview-australian-wines-in-china-in-the-post-free-trade-era","status":"publish","type":"post","link":"http:\/\/www.wineblogchina.com\/?p=5931","title":{"rendered":"Group interview: Australian wines in China in the post-Free Trade era"},"content":{"rendered":"

By Maxime Lu \/ \u9646\u6c5f<\/a><\/p>\n

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What has changed for Australian wines in China since the two countries signed the Free Trade Agreements a year ago? Decanter spoke exclusively to Wine Australia, Chinese importers and wine experts to grasp the momentum.<\/p>\n

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\"136740_chafta-china-australia-andrew-robb-gao-hucheng-tony-abbott-big\"<\/a><\/div>\n<\/div>
Image: Australian Trade and Investment Minister Andrew Robb and Chinese Commerce Minister Gao Hucheng signing the China-Australia Free Trade Agreement in Canberra on 17 June 2015, witnessed by Prime Minister Tony Abbott. Photo: DFAT\/Andrew Taylor<\/figcaption><\/figure>\n

The <\/b>latest of <\/b>tariff reduction<\/b><\/h4>\n

The latest tariff reduction after the China-Australia Free Trade Agreement came to effect on 1st January 2016.<\/p>\n

The second stage of the tariff reduction mean that Australian wines now enjoy a tax rate of 8.4%, as oppose to the original 14%, when entering China, according to Explanatory Schedule of Chinese Tariff Commitments published by Australia\u2019s Department of Foreign Affairs and Trade.<\/p>\n

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What has changed so far – Trade body<\/b><\/h2>\n

\u2018The change mainly lies in the way people see Australian wines,\u2019 Willa Yang, head of trade body Wine Australia in China, told DecanterChina.com.<\/p>\n

\u2018The Australian wineries and importers are much more confident for the market as their products are expected to become more competitive price-wise,\u2019 said Yang.<\/p>\n

During the 12 months until September 2016, the export value of Australian wines to China has increased 51% to reach 474 million AUD, while the export volume has increased 52% to hit 90 million litres, according to Wine Australia.<\/p>\n

\u2018The increase is evident to the positive effect of the Free Trade Agreement,\u2019 said Yang.<\/p>\n

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Image: Eden Valley, credit Chris Mercer<\/div>\n<\/div>\n<\/figure>\n

Importers<\/b><\/p>\n

For the importers, the actual effect comes more gradually.<\/p>\n

\u2018We are seeing more and more Australian wineries or brand owners coming to build their online shops, or joining big online wholesalers on Tmall International,\u2019 said Huang Jing of the New Media Department of Alibaba, adding that they are currently working with supermarket and wholesaler groups including Woolworths and Metcash.<\/p>\n

\u2018We saw great growths in sales of Australian wines,\u2019 agreed Joanna Zheng, Senior Product Director of Amazon China.<\/p>\n

\u2018It (Free Trade Agreement) is good news to the market in China but so far its impact on the cost is limited, consequently on the market overall,\u2019 said Matthew Gong, spokesperson of ASC Fine Wines.<\/p>\n

\u2018However, it will eventually give more competitive edge in pricing to Australian wines for their long term development in China.\u2019<\/p>\n

Although there\u2019s no significant influence on sales yet, \u2018we saw more attention and investment to the Chinese market from producers\u2019, said Wang Xiaoshan, Market Director of Joyvio, wine importer and subsidiary of IT giant Legend Holdings, which also owns Lenovo.<\/p>\n

\u2018The tariff reduction can eventually help merchants to reduce 20% of their costs,\u2019 explained Marcus Ford, General Manager of Pudao Wines and Head of Wine Langton’s East Asia, \u2018though it\u2019s still far from the tax-free Hong Kong market.\u2019<\/p>\n

Therefore the benefit of the bilateral trade agreement is \u2018mainly to attract more attention and investment to Australian Wines,\u2019 said Ford.<\/p>\n

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\"136741_australia-mornington-barrels\"<\/a><\/div>\n
Image: Australian cellar, credit Chris Mercer<\/div>\n
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Consumers<\/b><\/p>\n

For consumers, the reduced tariff has brought more \u2018minor\u2019 or \u2018lesser known\u2019 Australian wines to China, said Christian Zhang, head sommelier of Shanghai Yacht Club On The Bund.<\/p>\n

\u2018Consumers have started to recognise Australian wine brands other than Penfolds. They have started to realise that Australian wines may be a more value-for-money choice than French wines.\u2019<\/p>\n

The challenges <\/b><\/h4>\n

The Free Trade Agreement has attracted many to set their feet into the wine industry \u2018before getting fully prepared for it,\u2019 warned Ford.<\/p>\n

\u2018The most important thing is how you can get the wines sold,\u2019 he added, \u2018It\u2019s not enough just shipping the wines over to China.\u2019<\/p>\n

\u2018For the top-end Australian wines, besides a few famous brands, the vast majority still need an enormous amount of marketing to make them known to consumers,\u2019 said Gong.<\/p>\n

The use of screw caps on the more expensive Australian wines is another challenge for consumers to make the decision to buy.<\/p>\n

\u2018Although professional buyers would not mind screw caps, some consumers would still doubt the quality of the wine, especially when they need to pay a higher price for it,\u2019 said Wang Xiaoshan.<\/p>\n

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Image: Chinese wine lovers at Decanter Shanghai Fine Wine Encounter<\/div>\n<\/div>
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The potential<\/b><\/h4>\n

While Chilean, Argentinian and Spanish wines are fighting for market share in the price bracket under 100 RMB (10 GBP), \u2018in the price bracket between 150 to 200 RMB (15 to 20 GBP), you can already find many value-for-money Australian wines,\u2019 said Marcus Ford.<\/p>\n

\u2018This should become the mainstream for Australian wines,\u2019 he said, adding that Australian wines are no longer synonym to \u2018cheap wines\u2019, and the top brands are responsible for raising the general image of Australian wines in China.<\/p>\n

However, to ensure a long-term development of Australian wines, how to better tackle fake wines is crucial, said Christian Zhang.<\/p>\n

\u2018For example, among the top Australian wines brought by consumers to our restaurant, half or even more can be fake,\u2019 he said.<\/p>\n

\u2018This is seriously damaging to the good name of the producers and their future in the Chinese market.\u2019<\/p>\n

In addition, Australian producers should consider adjusting their offering based on market preferences, said the sommelier.<\/p>\n

Half-dry Riesling, for example, will be more welcomed by Chinese consumers than the widely available bone-dry style, he said.<\/p>\n

As the next step, Wine Australia plans to \u2018bring more events to second or third-tier cities in China\u2019, said Willa Yang.<\/p>\n

\u2018The mission is to make consumers feel less distant to (Autralian) wines, and make them feel that this is something they can enjoy casually.\u2019<\/p>\n

*This article is an abstract of the original interview.<\/i><\/p>\n

Translated by Sylvia Wu \/ \u5434\u5609\u6ea6<\/p>\n","protected":false},"excerpt":{"rendered":"

By Maxime Lu \/ \u9646\u6c5f What has changed for Australian wines in China since the two countries signed the Free Trade Agreements a year ago? Decanter spoke exclusively to Wine Australia, Chinese importers and wine experts to grasp the momentum. Image: Australian Trade and Investment Minister Andrew Robb and Chinese Commerce Minister Gao Hucheng signing … Continue reading →<\/span><\/a><\/p>\n","protected":false},"author":3,"featured_media":0,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[582,3,1038,991,828],"tags":[1592,1694,1901],"_links":{"self":[{"href":"http:\/\/www.wineblogchina.com\/index.php?rest_route=\/wp\/v2\/posts\/5931"}],"collection":[{"href":"http:\/\/www.wineblogchina.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"http:\/\/www.wineblogchina.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"http:\/\/www.wineblogchina.com\/index.php?rest_route=\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"http:\/\/www.wineblogchina.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=5931"}],"version-history":[{"count":1,"href":"http:\/\/www.wineblogchina.com\/index.php?rest_route=\/wp\/v2\/posts\/5931\/revisions"}],"predecessor-version":[{"id":5936,"href":"http:\/\/www.wineblogchina.com\/index.php?rest_route=\/wp\/v2\/posts\/5931\/revisions\/5936"}],"wp:attachment":[{"href":"http:\/\/www.wineblogchina.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=5931"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"http:\/\/www.wineblogchina.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=5931"},{"taxonomy":"post_tag","embeddable":true,"href":"http:\/\/www.wineblogchina.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=5931"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}